IRS Tax Advice
In 1995 a number of people wrote the Internal Revenue Service requesting a tax indentification number of their Pure Trusts, a common law business trust. Several Division heads in the IRS wrote letters back to these people advising them that Pure Trusts were exempt from filing income tax, and that IRS could not give them tax identification numbers. These letters went back and forth from people to IRS for a number of years, and people using the Pure Trust opened bank accounts using the identification numbers that often came with the Pure Trusts that they purchased.
Then IRS changed its mind and decided that Pure Trusts were not tax exempt, and started prosecuting people who had been using their Pure Trust for tax evasion. IRS never sent retraction letters to anyone advising that their initial letters were wrong, ill advised, or that the information in the initial letters was inaccuarte. They just began prosecuting Pure Trust holders.
Now which Pure Trust holders that they chose to prosecute and which ones they chose to give a pass to is known only to them. During an indictment in a case here in U.S. District Court for the Southern District of California, the indictment was given by a grand jury based on the testimony of only one witness. The witness was a special IRS Agent who testified she was expert in Trust Law, and an expert in Tax Law. The Agent then went on to testify that that she could find no support in the Federal Codes for Pure Trust leading the grand jurors to believe that there was no legal support for Pure Trust. There is ample support for Pure Trust in the cases - Pure Trusts are not statutory. But the agent deliberately mislead the jurors to believe that there was no law supporting Pure Trust and then went on to say twice that Pure Trust were illegal. She lied to the grand jurors about Pure Trust law.
The Agent, throughout her testimony, advised the grand jurors that the person who had the trust used "a false identification number" because it could not be traced by IRS, wasn't issued by IRS. Remember, IRS refused to issue tax ID numbers to people who had Pure Trusts. Now, the IRS agents who want indictments advise the grand jurors that the "suspects" used "false" ID numbers. The person used the number that came with the trust because IRS was not giving Pure Trust holders tax ID numbers.
The IRS agent never told the grand jurors that the IRS sent letters to people who asked, advising them that their Pure Trust was tax exempt and they had no filing requirement. Government claims it has no duty to give exculpatory evidence to a grand jury, but under the McDade Citizen's Protection Act of 1998, the State's ethical rules apply and California State would require that this information be given. The person's trustee and accountant had written IRS and received two of the "Pure Trust" letters. The person who was indicted had sent the IRS General Counsel here in San Diego a letter of inquiry about these letters and sent copies of the IRS Pure Trust letters to the General Counsel, showing that the person had relied on the IRS' advice in not filing returns.
Now what we have is IRS giving advice about tax law, and indicting persons for taking their advice, institutional entrapment. As of 2-4-05, the court will not order Government to turn over all of the material relating to the Pure Trust letters although it is known that at least 5000 were sent and no retractions were ever sent.
Word to the wise - do not go to IRS for advice about your taxes. You may get indicted for following it. Stay tuned
Noel Spaid 858 350-8718
--Noelspaid 20:39, 14 Feb 2005 (UTC)